Kenya Decides 2022 - Ruto's Presidency and Kenya's Business Investment Relations
Kenya Decides 2022.

Kenya Decides 2022 - Ruto's Presidency and Kenya's Business Investment Relations

Insight

Welcome to my first LinkedIn newsletter - an online resource for global insight and predictive risk intelligence. This first piece was initially submitted to a behavioural intelligence firm that predicts emerging risk on August 22.

I hope you enjoy this first feature.


Predictions

  • Ruto's policies will boost agricultural, financial, and technological investments and cut importation.
  • Ruto's policies to boost employment will hamper China-Kenya relations.
  • Odinga's challenge of the election result will build low-level tension and short-term security and political risk.

Development

  • Raila Odinga files a lawsuit to challenge the August 9 election result.
  • William Ruto receives diplomatic and business envoys in preparation for swearing in and assumption of office.

Insights

In the sustained faceoff between President Uhuru Kenyatta and Deputy President William Ruto that began shortly after the 2017 election, Ruto was declared the winner of the August 9 election against his strong contender Raila Odinga who was backed by President Kenyatta. This makes a Ruto presidency prepared to take a different approach to governance and business investment relations from President Kenyatta's. The swearing-in of Ruto as president will see many investor-government relationships forestalled or renegotiated.

Odinga's history of challenging election results and the 2017 Supreme Court win for a re-run, the close ties of the just concluded election result and the backing of President Kenyatta make Odinga more determined to challenge the election outcome. As a result, regardless of the declaration of Ruto as president-elect and the growing diplomatic and business envoys he is receiving, Odinga will push ahead with the court suit, including building anti-Ruto mobilisation.

A government led by Ruto will continue to prioritise Kenya's technological investment along with agriculture, financial solutions and reduced Chinese labour relations to enable Ruto to deliver on campaign promises. The anti-Chinese policies will therefore likely increase the western, African, and other friendly Asian actors' market in Kenya starting in 2023, which will likely lead to tensions between Kenya and China, especially in loan repayments.

Implications for Business

Business and Financial: Ruto's economic stands to boost agriculture, technology, and financial solutions, presents new investment opportunities and will see Billions of Kenyan Shillings investment in credit, fibre optic, Tech firms, raising production of agricultural produce from 2023, and reduced importations, especially from China. Also, Ruto's policies will see restrictions on Chinese labour in Kenya. Further, this focus on economic revitalisation will continue in the next 3-4 years.

Regulatory: Ruto's government will undertake reforms and renegotiations with foreign investors in the next year to boost Kenya's business gains and competition with foreign businesses and move away from President Kenyatta's legacy. This will likely lead to new regulatory requirements but with improved business opportunities. Further, it is likely to see the deportation of Chinese workers, demands on companies to increase and utilise the local human resource and a more welcoming atmosphere for Tech start-ups.

Security and Stability: Ruto's agenda and planned investments will enable his government to boost the employment of young Kenyans. This will help address the wide gap of youth unemployment and the country's social needs. It will also foster the country's stability during Ruto's tenure. Nevertheless, Ruto's list of allies facing corruption claims might be detrimental to this agenda. Moreso, while Kenya remains a business and Tech Hub giant in East Africa, the situation in its surrounding like the war in Ethiopia, the Jihadist rebellion in Somalia, the South Sudanese situation, the "false" democratic system in Uganda perpetuated by Yoweri Museveni, who is a close ally of Ruto, means Kenya will see pressure from security and democratic issues.

Brief scenarios

Most likely: Ruto's government will likely be able to capitalise on Kenya's position as East Africa's business and Tech Hub giant and the growing investors' interest in Kenya to renegotiate more favourable business deals for Kenyans, including through a new regulatory framework for investors. It will be able to use these requirements to increase foreign companies' recruitment of Kenyans and boost an agricultural and tech-friendly investment environment, which will support the creation of more jobs for Kenya's large unemployed young people. This will boost the nation's security and stability.

Less Likely: It is possible that events in neighbouring countries like Ethiopia, Somalia, and South Sudan will spill over and make Kenya less attractive to investors. In this instance, Ruto's government will be forced to undertake moves that will become anti-refugees and asylum seekers, especially on its border with Somalia and South Sudan, to salvage Kenya's glory. This will generate internal and international controversy.


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